Flybe's share price was soaring this morning as investors digested the progress being made on the struggling airline's turnaround plan.

The budget airline, which issued an encouraging trading update for the first quarter, said it had managed to cut the cost of a UK seat by 3.4 per cent to £51.92.

It is continuing to seek “long-term solutions” to its surplus aircraft – seven E195s – which it said was being “actively pursued”.

“Maximum exposure is £80m over four years,” Flybe said this morning. “Exit costs are being targeted significantly below this figure.”

Flybe's share price was up 6.3 per cent in early trading on the back of an upbeat trading statement, reporting “sustained passenger and revenue growth” saying it was now in “the next chapter of its transformation”.

Seat capacity climbed 12.3 per cent to 2.8m seats, while passenger numbers grew 9.8 per cent to 2.1m. Revenues were up 11.6 per cent to £147.7m.

This summer Flybe launched 30 new routes, including nine at Cardiff and nine at Bournemouth, and during winter it plans to increase the frequency of key routes “to address better the needs of time-sensitive travellers”.

Hamaad said: "As we enter the next phase of our transformation, Flybe has again delivered revenue and passenger growth in the quarter, demonstrating the strength of our core business. We carried significantly more customers than the same time last year and maintained our industry-leading punctuality levels.

“We remain focused on tackling the surplus E195 aircraft, our final legacy issue, and are actively pursuing a range of solutions."

Numis analyst Wyn Ellis backed the improvements being made at the business.

"Flybe has made very substantial progress in executing its turnaround plan and resolving legacy issues," he said.. "The fleet and the network have been reconfigured and the brand revitalised. In our view, the business is now ready for profitable growth and strong free cash flow generation."